To track and look into cryptocurrency-related offences, a partnership has been made between the Securities and Futures Commission (SFC) of Hong Kong and the Hong Kong Police Force. This new organization was created in response to continuous problems involving the important Hong Kong exchange, JPEX.
The major objective of the joint crypto monitoring group, which was established following a discussion between the agencies on September 28th, is to combat criminal activity connected to virtual asset trading platforms (VATPs) present in Hong Kong.
Regulators were largely motivated to take action by the controversy surrounding JPEX, which has been accused of advertising services in Hong Kong without the necessary SFC licence. In what is being referred to as Hong Kong’s largest-ever fraud case, JPEX is allegedly responsible for over 2,086 investors losing almost $166 million as a result of its alleged illegal activities when combined with others.
Following this, Hong Kong’s government took prompt action, leading to the detention of 18 people connected to JPEX by the police during their inquiries. The incident demonstrated the pressing need for more stringent cryptocurrency regulation and control in Hong Kong.
As of September 18th, JPEX has suspended Hong Kong users’ ability to deal in cryptocurrency due to regulator bias and poor media coverage. The exchange said that these reasons caused liquidity partners to freeze its cash. Angelina Kwan, a former SFC officer, has previously argued in favor of stricter crypto regulations in Hong Kong.
The newly formed joint crypto group now has a specialized team to keep an eye on VATP illegalities, report suspicious activity, evaluate exchange risks, and support associated investigations.
Director of SFC enforcement Christopher Wilson underscored the Commission’s dedication to addressing problematic platforms and defending investors. The group will aggressively exchange intelligence, according to assistant police commissioner Eve Chung Wing-man, in order to resolve VATP concerns and protect the public.
The initiatives from Hong Kong show how regulators all across the world are being pushed to quickly adjust their tactics in reaction to the development of the cryptocurrency sector. The JPEX incident provided opportunities to improve frameworks while simultaneously exposing potential problems.
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